Keywords

1 Usace Evaluation of Proposed Civil Works Projects

1.1 USACE Navigation Mission

The U.S. Army Corps of Engineers (USACE) is one of the world’s largest public engineering, design, and construction management agencies. The major Civil Works (CW) mission areas include navigation, flood risk management, hydropower, ecosystem restoration, coastal storm damage reduction, hydropower, water supply and recreation (USACE 2000). Navigation is one of USACE’s major missions. USACE maintains 12,000 miles of inland and intracoastal waterways (9- to 14-foot draft), 13,000 miles of channels of deep draft channels (greater than 14 feet) for commerce. In addition, the Corps also maintains 236 lock chambers at 191 sites on the coastal and inland navigation systems (USACE 2022). These navigation infrastructures affect all 50 states and many other nations in terms of their dependance on the economic activity supported by these navigation systems.

1.2 The Federal Objective

Improvements to the navigation system are funded by the federal government and implemented by USACE. The Economic and Environmental Principles and Guidelines for Water and Related Land Resources Implementation Studies (P&G) (U.S. Water Resources Council 1986) established the federal objective of water and related land resource planning: “to contribute to national economic development consistent with protecting the Nation’s environment, pursuant to national environmental statutes, applicable executive orders, and other Federal planning requirements.” Table 1 identifies the four accounts were identified to facilitate the evaluation and display of effects of alternative investment decisions (U.S. Water Resources Council 1986).

Table 1. Four accounts to facilitate the evaluation and display of effects of alternative investment decisions (U.S. Water Resources Council 1986).
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1.3 Contributions to National and Regional Economic Development

Improvements to the navigation system funded are by the federal government and implemented by USACE are subject to a detailed benefit-cost analysis which could include quantification of benefits and costs that accrue at both the national level. This evaluation facilitates an evaluation of national economic efficiencies (contributions to the NED account) to be realized by the navigation improvement. For navigation improvements, project benefits are generally defined as the reduction in transportation costs to shippers and other users of the waterways (USACE 2000).

In recent years, there has been a renewed emphasis on additional factors such as environmental justice, social equity, ecosystem services and local and regional economic effects of USACE projects. USACE must consider changes in the distribution of regional employment and regional income (RED account) is required as part of the formulation and evaluation of proposed CW projects (USACE 2021). Therefore, economic impact analysis is integral to USACE’s evaluation of potential inland navigation improvements.

2 Regional Economic System (RECONS)

2.1 Purpose of RECONS

The USACE Institute for Water Resources (IWR) developed the Regional ECONomic System (RECONS) to provide accurate and defensible estimates of economic activity associated with USACE projects, programs, and infrastructure across all CW mission areas. Estimates of economic activity are measured as industry output, employment, labor income and value added and are provided simultaneously for three levels of geography: local, state, and national (IWR 2019). The RECONS modeling framework in conjunction with its accessible web-based interface enables USACE to readily leverage economic impact analyses to support decision making and stakeholder communication across all levels of USACE, whether it be to assist in the prioritization of which projects to fund through infrastructure bills or comparing alternative investment decisions for specific water resource problems.

RECONS automates calculations of the effect of Corps projects, programs, and infrastructure affect regional economies across the nation. This information helps demonstrate the importance of existing and potential Corps investments to decision-makers, project stakeholders and communities. RECONS was designed with four primary purposes:

  1. 1.

    Provide an efficient and consistent approach to conduct economic impact analyses;

  2. 2.

    Enable users to conduct valid and reliable economic impact analyses without having the degree of knowledge or experience of Input-Output analysis required by comprehensive I-O models;

  3. 3.

    Enable users to simultaneously estimate economic impacts at different geographic scopes (local, state, national) and to aggregate impacts across projects and regions; and

  4. 4.

    Increase rigor and consistency of economic impact analyses are conducted by USACE (IWR 2022).

RECONS is a certified model for use across USACE, a designation reflecting the model’s compliance with the Agency’s technical quality, system quality and usability requirements (USACE 2011).

2.2 Web-based Dynamic Simulation System

RECONS is a web-based dynamic simulation system and is developed with PHP/MySQL applications with the server hosted on Cloud Computing Services. RECONS utilizes a mapping function which allows users to portray the areas benefited by USACE programs. There are currently more than 1,500 built in regional I-O models that correspond to USACE’s CW mission areas. Multipliers and other economic ratios and factors are from IMPLAN, US Bureau of Economic Analysis, and Bureau of Labor Statistics. It also allows frequent modifications/updates and new add-ons to be made through the server and instantly distributed.

The work USACE undertakes and funds through its CW budget is categorized into work activities. For each work activity, expenditures associated with that activity are mapped to IMPLAN sectors, and these allocations of expenditures are termed spending profiles. IMPLAN models were created for each geography, and multipliers, ratios, and regional purchase coefficients (RPCs) were extracted from the IMPLAN models and imported into RECONS. The extent to which an effect is captured within the impact area is represented by local purchase coefficients (LPCs), which are either based on the RPCs in the IMPLAN model or customized with information from USACE or industry experts (IWR 2019a).

2.3 Model Framework

RECONS is designed to provide decision makers a comprehensive understanding of how a region’s economy is affected throughout the project life cycle. Short-term economic activity is attributed to direct federal spending on infrastructures and operations and maintenance (e.g., spending to replace an existing lock and dam on an inland waterway) while long-term economic activity results from the primary users of infrastructure constructed and maintained by USACE (e.g., long-term utilization of the lock by shippers to transport commodities). RECONS accounts for economic activity associated with directly affected industries (direct effects), backward linkages to the industries, businesses, and households supplying the goods and services used by the directly affected industries (indirect effects), as well as the household spending associated workers spending their income within the impact area (induced effects).

To facilitate the evaluation of short- and long-term economic activity supported by USACE CW projects, programs and infrastructure, RECONS comprises two sets of modules: Civil Works Spending Modules, and USACE Programs and Infrastructure Modules. The USACE CW spending models are used to estimate short-term regional economic impacts of project expenditures within the eight USACE CW business lines (e.g., construction or operation and maintenance expenditures). The USACE Programs and Infrastructure Modules are used to estimate the long-term regional economic impacts of activities induced by USACE programs and infrastructure (use of navigation infrastructure for shipping activities). These activities and expenditures support economic output, jobs, earnings, and value added. Results are shown for three levels of geography: local, state, and national impact areas (IWR 2022).

2.4 User Interface

RECONS is deployed across USACE offices for use by economists, planners, and others as an online tool accessible through the internet with a password. For each RECONS module, users are prompted through a series of screens to provide or verify the necessary inputs for the economic impact analysis. For example, to estimate the regional economic activity resulting from rehabilitation of a lock on an inland waterway, RECONS prompts the user through the following process (IWR 2019b):

  • Step 1: Select a Project

  • Step 2: Select a Business Line Work Activity and Year of Expenditure

  • Step 3: Review Economic Impact Area and Socioeconomic Information

  • Step 4: Confirm or Modify Project Expenditure

  • Step 5: Confirm or Modify Spending Profile

  • Step 6: Confirm or Modify LPCs

  • Step 7: Review Economic Impact Results.

Similarly, to estimate the regional economic activity resulting from long-term use of a lock by commercial shippers, RECONS prompts the user through the following process (IWR 2019b):

  • Step 1: Select an Inland Port or Harbor

  • Step 2: Select a Year of Expenditure

  • Step 3: Review Economic Impact Area and Socioeconomic Information

  • Step 4: Enter Shipping Volume per Commodity Type

  • Step 5: Confirm or Modify Spending Profile

  • Step 6: Confirm or Modify LPCs

  • Step 7: Review Economic Impact Results.

The results of each module are displayed in a similar manner, regardless of the module selected. Figure 1 provides a sample screenshot of RECONS mapping interface while Fig. 2 provides a screenshot of the RECONS ‘Results’ tab. The overall summary provides a snapshot of the local, state, and national economic impacts. Users can save their analysis with a title or download a report which provides documentation of all inputs and results from the evaluation.

Fig. 1.
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RECONS Web Interface (IWR 2019b).

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Fig. 2.
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RECONS ‘Results’ Screen (IWR 2019b).

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2.5 RECONS Applications for Enterprise-Level Reporting

RECONS is applied across all USACE CW mission areas on a regular basis. Over 200 USACE economists have used RECONS to conduct hundreds of analyses each year to support decision making and stakeholder communication across all levels of USACE. RECONS is utilized to communicate the value of USACE CW mission areas to nation. Although RECONS was initially developed to estimate the economic impacts of American Recovery and Reinvest Act in 2009 and was used as the agency tool to report how the government spending will support jobs and local economies, it has evolved into a more versatile and comprehensive regional economic impact analysis tool over these years. It has been utilized by the agency to estimate and report jobs supported by various federal government stimulus spending bills since its inception and is currently being used to estimate jobs supported by USACE’s proposed construction projects for the 2021 US Infrastructure Investment and Jobs Act. Comprehensive regional economic impact assessments using RECONS assures USACE presents results consistently across business lines and geographic regions.

2.6 RECONS Applications for Evaluating Civil Works Projects

RECONS is also used to address the RED account in the formulation and evaluation of proposed water resource projects, which supports the USACE decision-making process. The certification of RECONS for use in CW planning efforts in conjunction with the user-friendly interface facilitates use of the model at a low cost to projects. RECONS has been applied to facilitate navigation-related economic impact analyses across the nation.

RECONS is regularly used to support the evaluation of proposed navigation improvements. In 2017, RECONS was applied for an Economic Evaluation Study to look at the regional and national economic impact of short term and long term closure of the Soo Locks at Sault Ste Marie, Michigan, and the annual economic contribution of the Soo Locks to Great Lakes Basin industries that use the Soo Locks to ship commodities. RECONS has also been used to support the evaluation of economic and environmental tradeoffs. For example, RECONS was utilized in support of the Great Lakes and Mississippi River Interbasin Study – Brandon Road (USACE 2018), a study which sought to identify a solution to reduce the risk of aquatic invasive species transfer between the Great Lakes and Mississippi River Basins while minimizing impacts to waterway uses and users. RECONS was used estimate the long-term changes in regional economic activity arising from the potential implementation and subsequent operation and maintenance of aquatic nuisance species controls at Brandon Road Lock and Dam (BRLD) within the Chicago Area Waterway System (CAWS). With 11 million tons of cargo transit the lock on an average annual basis, it necessary to understand how industries the Chicago area would be impacted if modifications to BRLD hindered their access to markets. The evaluation considered local firms that ship goods through BRLD and those that receive shipments through the lock and dam. Expected changes to shipping costs were linked to changes in total sales. If shipping costs increased for industries using the BRLD to deliver or receive goods and commodities, then the selling price of those goods would be impacted. In turn, impacted firms would face a reduction in competitive advantage relative to other firms (USACE 2018). Estimated changes in employment and income in the Chicago area due to implementation of a GLMRIS-BR alternative plan was to help communicate the tradeoffs between maintaining and expanding uses of navigable waterways while reducing the risk of invasive aquatic species transfer. More recently, RECONS was applied to a study requested by International Joint Commission Great Lakes-St. Lawrence River Adaptive Management to estimate the economic impacts to commercial shipping industries of closure of St. Lawrence Seaway to Commercial Navigation (Chang et al. 2021).

2.7 Considerations for Developing Regional Economic Impact Modeling Tools for Federal Entities

The widespread and frequent application of RECONS in USACE suggests other Federal entities may benefit from developing customized regional economic impact modeling tools to better inform investment decisions and stakeholder communication. The successful development and implementation of RECONS provides insights as to what federal entities should consider prior to undertaking their own development of such a tool. Key considerations are listed below.

  1. 1.

    Defensibility: Federal entities should assure the modeling framework, data, methods, and results are defensible. To become eligible for USACE-wide application, RECONS underwent a rigorous review process to be a ‘certified’ model. The review assures a model’s technical quality, system quality and usability requirements (USACE 2011). The resulting model certification ultimately serves as an agency-wide indicator that the model results can be readily utilized and reported with confidence. This increases the likelihood model will be used and helps assure consistent reporting across geographic regions and project types.

  2. 2.

    Relevance: Federal entities should assure a customized regional economic impact modeling tool is relevant, in that it accommodates a comprehensive array of applications. USACE implements a various types of Civil Works projects across numerous geographic regions. RECONS can be leveraged to estimate the economic activity supported by federal spending across all Civil Works project types (inland navigation, deep-draft navigation, flood risk management, etc.). RECONS also provides capability to evaluate the long-term economic activity resulting from the primary users of infrastructure constructed and maintained by USACE. If needed, new work activities and impact areas may be requested. Offering diverse applications supports widespread application of the model and substantially reduces the need to obtain or develop additional regional economic impact modeling tools on an ad-hoc basis.

  3. 3.

    Accessibility & Usability: Federal entities should assure the regional economic impact modeling tool is accessible and user-friendly. RECONS is a web-based tool, making it readily available to any user with a username and password. This assures users are always accessing the current version of the model, and any technical improvements immediately benefit all users. The model framework is consistent across analysis types. Knowledge that users gain from a single RECONS application can be readily transferred to the other model applications. The RECONS user guide, methods manual and other support documents are available for download from within the RECONS model. This assures the support documents are readily accessible.

  4. 4.

    Establishment of a Long-Term Model Support and Maintenance Plan: Federal entities should assure a long-term model support structure and maintenance plan are identified and funded. The RECONS program is managed by the USACE Institute for Water Resources, which provides funding to a national technical support team on an annual basis. The support team develops and provides training, as are readily engaged by users across the enterprise for model support. A model development team is also funded on an annual basis, which provide continual support with model debugging and the periodic incorporation of new input data. Periodic virtual web-based training and in-person training workshops are scheduled, and ad-hoc trainings are provided upon request. These regular trainings also allow for users to provide feedback about potential model improvements and needs for additional model applications. Collectively, establishment of the model support structure and regular maintenance facilitates continued efficient and effective model application across the enterprise.

3 Conclusions

As one of the objectives of the USACE’s Navigation mission is to provide safe, reliable, and efficient waterborne transportation systems, the USACE accomplishes this mission through a combination of capital improvements and the operation and maintenance of existing facilities and waterways through sound planning and best available data for decision making. This paper described the capabilities of the RECONS model, the assumptions and approach used for the model, and the use of the model to estimate existing and potential impacts on various harbors, ports and inland waterways across the USA. The results from RECONS can serve not only as a means to communicate with stakeholders of the importance and values associated with navigation infrastructure, also augment the traditional benefit cost analysis by providing more comprehensive benefits with regard to the return on investment for federal spending.

The development of RECONS enabled the defensible and consistent application of regional economic impact modeling across USACE. Estimates of jobs, revenues, income and value added help communicate the importance of USACE projects to decision makers, as well as non-federal project sponsors and stakeholders. RECONS is relied upon for an array of applications, whether it be to comprehensively evaluate of economic activity supported by USACE CW to support enterprise-level reporting or to serve as a readily accessible tool to characterize the regional economic effects of proposed navigation improvements. The widespread application of RECONS is encouraged by its web-based application and user-friendly interface. IWR continues to educate users on RECONS functionality and expand the model’s capabilities. This continued investment in regional economic impact modeling is integral to USACE decision making and the effective communication of how its CW projects affect the geographic regions across the vast nation. In addition, RECONS also provides a best management practice and can be replicated by other public agencies to generate reliable and consistent statistics to assess policy decisions such as public investment across the nation. This consistent modeling approach across all government agencies is extremely important for federal budget planning and communication, especially for supplemental funding such as the 2021 US Infrastructure Investment and Jobs Act.